Ford aggressively increasing presence in China

DEARBORN, MI- Ford Motor Co. is aggressively increasing its sales and production in China.

Dave Schoch, president of Ford Asia Pacific, said the Dearborn-based automaker expects its market share in China to grow to about 5 percent this quarter -- up from 2.5 percent in early-2012 and 3.2 percent to end last year.

“I’m really pleased with the progress we’re making,” Schoch said during a media roundtable discussion Wednesday at the company’s world headquarters. “I’d like to be going faster. We do have some restraints … but we’re making very good progress.”

Schoch said those “restraints” are strongly due to powertrain shortages and strong demand for its new product portfolio, which recently expanded five to 13 vehicles, including new segment entries such as the Fiesta ST, Focus ST and Explorer.

Ford, Schoch said, is hoping to address some shortages by mid-decade, as the company expands its assembly and powertrain plants in Asia Pacific to 24 by 2015. Ford currently has 14 plants. Four of the new assembly plants and three engine plants are in China.

Ford expects to grow capacity in China to 2.9 million units in 2015, a 1.1 million increase from 2012.

In this Monday, Aug. 27, 2012 photo provided by Ford Motor Co., workers assemble a car at a new Ford/CFMA Chongqing Plant after its launching ceremony in Chongqing, China. Ford wants to double its Chinese market share to 6 percent by 2015. (AP Photo/Ford Motor Co.)

Ford is playing catch-up in China, where crosstown rival General Motors Co. dominates in regards to the Detroit automakers – selling 2.8 million vehicles in 2012.

On Wednesday, Ford announced sales in China were up 51 percent in the first three quarters of the year to 647,849 vehicles sold. Schoch said sales should top 1 million cars and trucks sold in Ford’s Asia Pacific region for the year next month, which is a record for the automaker.

“By mid-decade, I do expect Asia Pacific to be a major contributor to Ford’s profits,” said Schoch, who formerly served as chairman and CEO of Ford’s China operations. In the first half of 2013, Ford netted a $183 million profit.

Ford also plans to double its dealership network by mid-decade, according to Schoch. Ford currently has about 400 passenger car dealers and 200 truck dealers in China, where 75 percent of customers are new buyers.

Schoch said the main forces behind Ford’s growth in China is its One Ford plan and new product portfolio.

Ford’s imported passenger vehicles— Focus ST, Fiesta ST, Edge and Explorer—sold 16,405 wholesale units in the first three quarters of 2013, up 254 percent compared to the same period last year. In September, imported car sales were up 234 percent.

Schoch said Ford is heavily using social media and word-of-mouth to expand its reputation in China, where

Ford expects worldwide vehicle sales to hit 109 million by 2020, including 32 million in China alone. “China would be more than North America and Europe combined,” Schoch said.

The SUV and luxury segments, according to Schoch, are the fastest growing in China. Ford is now offering its “full family” of SUVs, but has a significant amount of work to do with breaking into the luxury segment.

In 2012, Ford announced it would start selling its luxury Lincoln brand by 2015 in China through a small dealer network. Four dealers, according to Schoch, will be ready in 2014.

"We believe that the Lincoln brand has good recognition in China and there is a great market there already," he said. "We're going to hit the premium segment very, very well."

Initially, Ford will ship Lincolns from North America instead of building them in China. Schoch would not discuss product details, but a good guess for the first vehicle is the MKZ sedan.

The luxury segment in China is forecasted to surpass the luxury segment in the U.S. by 2020. In China, luxury vehicle sales are expected to more than double – from 6 percent of the market today to nearly 9 percent by the end of the decade. Annual sales of luxury cars are forecast to be approximately 2.7 million units by then.